Home Commodities The Dutch government wants to close Europe’s largest gas field this year

The Dutch government wants to close Europe’s largest gas field this year

by SuperiorInvest

The Netherlands wants to shut down Europe’s biggest gas field this year because it is “very dangerous” to continue operating it, a government official said.

Hans Vijlbrief, the state secretary for mining who is responsible for the earthquake-prone Groningen gas field, said he wanted to close it by October 1 but would wait to see if there lack gas in Europe after winter. If necessary, it will remain open until October 2024.

An onshore gas field in the northeast of the Netherlands near the German border is on the “backburner” and producing only a fraction of its capacity, said Vijlbrief, which also ruled out expanding production at the site.

“We will not be opening any more due to security concerns,” he told the Financial Times. “It is politically completely unviable. But besides that, I won’t because it means you’re increasing the chances of an earthquake, which I don’t want to be responsible for.’

Since the 1980s, there have been up to 100 aftershocks a year in the area, with more than 160,000 property damage claims. The strongest recorded 3.6 on the Richter scale, with the effects amplified due to soft ground and tremors occurring near the surface.

Hans Vijlbrief, Dutch State Secretary for Mining © Imke Lass/Bloomberg

The Hague came under pressure to increase production at Groningen last summer after Moscow began cutting supplies to the EU over the bloc’s support for Ukraine. In 2021, Russia accounted 155 billion cubic meters of gas imports, 40 percent total EU consumption.

Instead, it shelved plans to shut it down and cut annual output to 2.8 billion cubic meters, the minimum needed to keep its pumps running. Production of more than 5 billion cubic meters would increase the risk of seismic activity in the area, Vijlbrief said.

Groningen, which opened in 1963, pumped more than 50 bcm at its peak nearly a decade ago. Haag told operator NAM, a joint venture between Royal Dutch Shell and ExxonMobil, to cut production from 2013 and announced the field’s closure in 2018.

“It’s very, very simple: anyone who has any knowledge of earthquake hazards tells me that it’s really very dangerous to continue producing there.” I am quite convinced that it is wise to close it,” said Vijlbrief.

Natural gas extraction equipment and pipelines
Earthquake-prone Groningen gas field © Cris Toala Olivares/Getty Images

Adding to the pressure is a parliamentary inquiry to confirm that previous governments covered up the fact that gas extraction was causing earthquakes.

The findings, to be presented next month, will be “devastating”, Vijlbrief said. “In all the hearings it was crystal clear that the whole safety aspect of the Groningen gas wells had been neglected for many years.

“I already have a large parliamentary majority that wants to conclude as soon as possible. This news will only strengthen that majority.”

The government has set aside €8.8 billion to settle compensation claims until 2028.

Map showing the Groningen gas field, Netherlands

Vijlbrief said the Netherlands – and Europe – had plenty of gas after securing imports from the US, Norway, Qatar and elsewhere, with a mild winter helping to keep inventories high so far.

The Netherlands last year cut gas consumption by an “astonishing” 22 percent compared to 2021, with the cut resulting in “companies dropping [output]” he said due to high energy prices.

Northwest Germany was heavily dependent on low-calorie Groningen gas, adapting domestic boilers and industrial units to burn it, but had already turned to alternative sources, he said. Most imported gas has a higher calorific value so it must be mixed with nitrogen to run in the same systems.

New nitrogen enrichment plant put into operation Gasunia, of the Dutch network operator is 98 percent complete, but the firm building the site has had to bring in alternative contractors to complete the work. Vijlbrief said the factory was “a necessary condition for the closure of Groningen”.

The government aims to provide incentives to companies to develop fields under the North Sea. Another 1 bcm could be produced within three years and another 2-4 bcm after five years, he said.

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